Andrew Leach on his new solar panel system—and the extra value it brings

Photo: Andrew Leach

If you follow climate policy in Canada, there’s a good chance you already know the name Andrew Leach. The Edmonton-based associate professor is an energy and environmental economist at the University of Alberta. He also chaired the panel whose recommendations underpinned Alberta’s Climate Leadership Plan. But you may know Leach best for his Twitter account, where he tweets about many (often policy-related) things—including a new solar panel system mounted on the roof of his garage. We recently spoke with Leach to find out how his system is working out, what it cost him, and what you should know before installing your own.

First of all, tell us about your new solar panel system.

The system’s brand new. We just installed it in the last couple weeks. It’s 7.6 kilowatts, which should generate somewhere between 9,000 and 10,000 kilowatt hours a year and offset our historical electricity use basically exactly—we might be a little over. We’re basically at the maximum size we could permit for Edmonton, and it’s on a south-facing garage roof that was purpose-built for it by the previous owners of our house, so we benefited from that.

How much did it cost you?

The net price was between $13,000 and $14,000. That’s after the [Alberta] government’s rebate. The rebate covers 30 per cent.

Will it eventually pay for itself, and if so, when?

It depends a lot on what happens both with Alberta power prices and pricing policy. If everything stayed as it is today… it would probably be around a 15-year full payback, and then over the life of the panels, you’d expect to make a four or five per cent return on your investment.

Photo: University of Alberta

What happens to electricity you’re generating but not using?

It’s a grid-connected system. During the hours when our system is generating more than we’re using, it flows back to the grid, and the hours where we’re using more than the system’s generating, it flows from the grid to us. The new power meters measure both ways, so you get a credit for what you send back to the grid, and you pay for what you receive from the grid.

Could you then, say, turn your solar system into a business by generating far more electricity than you need and selling it to the grid?

Currently, under the Micro-Generation Regulation, you’re not allowed to do that, so you cannot oversize your system. That may come up when you look at building-integrated solar like Tesla’s solar roof, if you want to cover your entire roof with solar panels. You’d end up with significant generation. As you move into that kind of role, we need to revaluate how we price access to the grid and such things.

But even with solar, there are significant returns to scale in building very large installations. Putting multiple 7.6-killowatt systems like mine on garage roofs would be more expensive than putting them all on one community hall roof. Three community hall roofs would be more expensive than putting a system three times the size on the roof of a Walmart. Putting a system on three Walmarts or 10 Walmarts would be more expense than a solar farm on a farmer’s field. We haven’t gotten away from the idea that there are returns to scale in energy generation.

Where in Canada is solar power most effective?

The farther south you get, for the most part, is going to be better. Southern Ontario has great solar resource, southern Alberta has great solar resource, southern Saskatchewan.

What compelled you to install a solar system? Was it about money or something else?

What drives my investment as much as anything else is the value that I get from it—I call it geek value. Suppose I get a cup-of-coffee-a-day worth of enjoyment out of this solar system. Let’s try to put a dollar figure on it. If I get a cup-of-coffee-a-day worth of not revenue but just enjoyment out of having the system, that pushes it to a 22 or 23 per cent return on investment. There are elements of every decision you’ll make, whether in business or personal finance, that are not just about pure financial return—whether it’s risk, preference or your own judgements. Just as an example, I’m going to spend a little money to get a better monitoring system so that I can look at every individual panel and see what every individual panel is doing. If you did a financial analysis, that’s almost a pure loss, but it’s giving me a different service. It’s giving me something I value, which is the ability to hyper-analyze my solar system, so I’m okay with that.

It’s better looked at it in some ways the way we’d look at a car. We look at things like what’s my fuel economy, what’s my depreciation, what’s my likely maintenance costs, my insurance costs, but we also factor a lot of things into the decision such as do I like the colour, do I like driving this car, do I think I’m going to enjoy what signal this car sends to the world about me. I think there are elements of all those things in a solar system that people attach value to. So if I end up on paper with a break-even rate of return after 20 years, it’s probably still a good investment for me.

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